Please connect the drive to the PC and make sure that it's available in My Computer. Also, try to change its assigned letter. You can do this from the Start > Control > Administration > Computer Management > Disk Management. Right click the partition of the external drive and assign another one and then start the backup application.
There is also the possibility that the application is not compatible with your current hard drive in which case you need to use another one. Acronis True Image Home would be a good choice.